Firewood prices down but may go back up, says industry

Take note – story published 1 year and 5 months ago

Since the introduction of a compensation system for the costs of purchasing heating wood, millions of euros have been paid to citizens. At the moment, the interest has dwindled, possibly due to fallen wood prices. Experts are warning of another rise in prices as the next heating season begins, Zemgale regional television reported January 12.

Jānis Bitēns from Jelgava is currently heating his house with briquettes, which he has provided enough for this winter. But prices on the market still shock him.

“Latvia is as if the richest country with forests, and such prices! And these prices for wood, that's not normal! I think it will remain, who will lower prices if you can earn well,” Bitēns said.

In September, the price of wood reached €90 per cubic meter, but in December fell to €55. Prices for briquettes and pellets have also fallen by around 20%. The Latvian Forest Industry Federation (LKF) said that not only prices have fallen, but demand has also fallen.

"In global markets, I see even a very sharp price cut going on. But this is due to the fact that there is a very warm winter in Europe as a whole, and the second is that everyone created speculative stocks on the traders' side, they have now realized that there is no winter, must sell existing stocks," said Kristaps Klauss, LKF board member.

During the peak of heating fuel demand and price increases in September and October, municipalities also started getting applications from the population for compensation. The general interest of the population was to obtain one-off EUR 60 compensation for the purchase of wood without a check. For example, more than 5,000 applications were received in Bauska in October to support energy resources. Of these, 97% were for purchases of wood and 3% for the purchase of pellets. In November, the number of applications for the purchase of wood was already halving. In December, there was only one application.

In total, nearly half a million euros has been paid in the compensation for heating forms in the three months of last year.

However, the wood industry federation warned that current relatively low prices can rise in the next heating season.

"Most likely they will step back up and we don't even know to what levels. And it is very likely that it will drag the prices of other fuels along," Klauss said.

In order to compensate for the increase in the costs of energy resources this season, households may submit an application to the local government by April 30 of this year.

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